Nick Clift from Tenassia, Scott Atkinson from TribeTech and Ryan Spillane from 360 Consulting share their stories and expertise on mergers and acquisitions covering topics such as the advantages and disadvantages of M&A, avoiding common pitfalls MSPs make in M&A, and how to know if you’re ready for M&A.
For MSPs, mergers and acquisitions are a powerful way to accelerate growth, enter new markets, acquire specialist skills (like cybersecurity), or scale faster than organic growth alone allows.
The most successful M&A outcomes come from long-term planning. Building systems, recurring revenue, leadership depth, and financial discipline from day one dramatically improves future valuation and deal success.
Many owners overestimate their business value. Australian MSP valuations are typically lower than US benchmarks, and true value is driven by adjusted EBITDA, recurring revenue, margins, and how well the business runs without the owner.
Managed services and high-margin recurring income are the biggest contributors to MSP valuations. One-off projects and product sales may boost cash flow, but they add little long-term value compared to predictable, recurring revenue.
Signing the agreement is only the beginning. The real work is integrating people, processes, culture, and customers so that “one plus one” genuinely creates more value — not disruption or client churn.
Many MSP acquisitions are funded through vendor finance, where the seller is paid over time using the business’s future cash flow. This approach reduces risk, aligns incentives, and often enables deals that wouldn’t work through bank funding alone.
M&A success depends heavily on shared values, leadership alignment, and clear expectations. Without cultural fit and a common vision, even financially sound deals can fail.
